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Biotech / Medical : Oxford GlycoSciences Plc -- Ignore unavailable to you. Want to Upgrade?

To: Jongmans who wrote (132)	4/19/2001 5:13:06 PM
From: keokalani'nui	Read Replies (1) \| Respond to of 469

Big deal. Still, when the all-conquering talk, the all-vanquished should listen. (Please don't sue me.) ___________________________ Plenty of value in biotech land April 18, 2001 By The markets team, UK-iNvest.com Genghis Lloyd-Harris at Credit Suisse First Boston is part of the all-conquering pharmaceutical team that clock up nearly as many awards as Manchester United. The team's area of expertise lies in the biotech sector, which has had a horrible 12 months. But it may be time for a change: in CSFB’s latest biotech review, "buy" recommendations outweigh "sells" or even "holds", often regarded as a tacit "sell". CSFB's favoured UK plays are Oxford GlycoScience (OGS), at 975p, with a £40 price target, and Galen Holdings (GAL), at 882.5p, with a £11 price target. Xenova (XEN) is rated a "buy" at 49.5p, but CSFB is still reviewing the implications of its recent merger with Cantab. Celltech (CCH) is rated a "hold" at £12.24. "We believe the recent weakness in OGS’s share price offers a chance to build a stake in a company we consider to be one of our top recommendations,” says Lloyd-Harris. “OGS is currently trading at just over two-and-a-half times cash value, which, in our opinion, makes the stock significantly undervalued." CSFB estimates that OGS is burning cash at the rate of £183m a year, but it expects the company to bring home earnings of £21.5m by 2002. Galen gets the nod thanks to the first approval of its key R&D project, the intra-vaginal ring (IVR). The product is an oestrogen ring that provides hormone-replacement therapy (HRT) for the treatment of menopause. However, the ring technology can be applied to other areas, such as infection control or even infertility treatment. The first approval for the ring is important as it confirms that the actual IVR technology is approvable. "We are currently forecasting fifth-year sales of $175m, which assumes only 3%–4% of both the oestrogen-only and combined strogen/progesterone hormone-replacement therapy markets," says Lloyd-Harris. Galen is trading on an estimated 21.9 times enterprise value/earnings (EBITDA) valuation for 2001. CSFB forecasts this will fall to 18.7 in 2002 and 15.5 the following year. Holding on CSFB is more reticent on Celltech, rating it only a "hold" despite some positive recent developments as it feels these are already in the price. "As we had expected following the receipt of an approvable letter last month, Celltech’s Metadate has been granted marketing approval in the US," says Lloyd-Harris. On a separate note, Celltech has signed an agreement to use Evotec VliP (virus-like particle) technology. The VLiP technology is to be applied to two of Celltech’s GPCR (G-protein coupled Receptor) targets. Celltech remains a well-respected company, but there is a lot of good news in the price. CSFB forecasts 2001 enterprise value/EBITDA will be 55.9. Although this is expected to drop to 46.6 in 2002, it still looks pretty expensive. This time last year, the biotech sector looked poised to deliver shareholders as much silverware as Manchester United. Today the sector as a whole looks a bit more wobbly. But the classiest players still offer the prospect of striking gold. uk-invest.com